Make us your home page

Scott's plan for Citizens Property Insurance would allow rates to rise

Rick Scott, the Republican candidate for governor, says he thinks “in a free market economy, prices will come down.” Some fear they’d triple.

Associated Press

Rick Scott, the Republican candidate for governor, says he thinks “in a free market economy, prices will come down.” Some fear they’d triple.

Rick Scott called for some politically tough medicine Monday when he unveiled his position on property insurance: Make the state's government-run company "actuarially sound."

Translation: Allow rates to rise for the nearly 1.2 million customers of Citizens Property Insurance.

Scott said he also wants to turn Citizens into the insurer of last resort to protect Florida taxpayers and make Florida's insurance market more attractive to private insurance companies spooked away by government intrusion — which has artificially depressed insurance rates from South Florida to Tampa Bay.

When asked if his proposal would lead to higher insurance rates, the Republican candidate for governor didn't answer the question directly.

"I believe that in a free market economy, prices will come down," said Scott.

Scott's proposal to revamp the insurance market coincided with a call to limit lawsuits against insurance companies, small businesses, car companies and doctors who perform surgeries under the auspices of the state. Known as "tort reform," lawsuit limits are the key concern of the Florida Chamber of Commerce, which endorsed Scott last week.

Scott's Democratic opponent, state Chief Financial Officer Alex Sink, said in a news release that Scott was on the side of "Big Business'' instead of the little guy by making it tougher for them to access the courts.

But Sink's spokeswoman Kyra Jennings said Sink also believes Citizens needs to become more financially sound and should also become the insurer of last resort in the state.

Jennings said Sink believes rates shouldn't increase by more than 10 percent annually — something the Republican-led Legislature mandated in 2009, two years after legislators froze the insurance company's rates.

"She doesn't want people to feel a significant sticker shock," Jennings said.

Scott's campaign, reached after his news conference, wouldn't say where he stood on whether Citizens' rates should increase by more than the 10 percent as called for in House Bill 1495, which it called "a step in the right direction."

The campaign pointed out that taxpayers and non-Citizens customers would be at financial risk if a major disaster blew a hole in Citizens' shaky finances.

But even Scott supporters, including Sen. Mike Fasano, R-New Port Richey, are a little leery of the call for so much free-market reform.

"The privates aren't coming back. But rates will go up," Fasano said. "I disagree that rates should go up, because people are suffering. When premiums go higher, your foreclosures are going to increase as well."

Fasano said he was told in 2009 that rates would triple for Citizens' customers if the government-run insurance company were to charge actuarially sound rates — that is, payments sufficient to cover likely maximum losses in a disaster.

Fasano said he does agree with Scott's call to make sure that those who receive insurance payments for damages from sinkholes actually use the money for repairs. Fasano also likes Scott's proposal to reduce fraud in a program that gives homeowners incentives to hurricane-proof their homes with building straps and shutters.

Democrats such as former Sen. Steve Geller of Cooper City, an architect of the 2007 insurance rate freeze, said Scott's plan is just a giveaway to the insurance industry.

"Republicans and the industry say that raising rates will lower rates," Geller said. ''I believe that. I also believe in the tooth fairy."

But David Letson, a University of Miami professor with the Rosensteil School of Marine & Atmospheric Science, said Florida needs to do a better job getting rid of Citizens, which is growing as private insurers flee the state. But Letson said it's not easy to reform the system because rates will rise in the short term.

"It's very unpopular," said Letson, a member of the business-funded group Florida TaxWatch. "You don't want to hear that from your candidate for governor."

Marc Caputo can be reached at [email protected]

Scott's plan for Citizens Property Insurance would allow rates to rise 09/20/10 [Last modified: Monday, September 20, 2010 11:28pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Shares in Tampa's Health Insurance Innovations rebound from stronger earnings report


    TAMPA — After a sharp drop in its stock price in August and September, Health Insurance Innovations on Monday announced strong revenue and net income gains in preliminary numbers for its third quarter of the year. The company also announced a $50 million stock buyback over the next two years meant to bolster its …

    After losing more than half its market value between August and September, shares in Tampa's Health Insurance Innovations are rebounding."The new share repurchase program underscores our confidence in our business strategy, financial performance, and the long-term prospects of our company while also allowing us the financial flexibility to continue to invest in our business," company CEO Gavin Southwell announced Monday. [Courtesy of LinkedIn]
  2. Trigaux: Campaign aims to leverage tourism ads to recruit millennials, businesses

    Economic Development

    TAMPA — Tampa Bay's unleashing one of its best weapons — a cadre of successful entrepreneurs and young business leaders — in a marketing campaign already under way but officially …

    Erin Meagher, founder of Tampa coconut oil products company Beneficial Blends, is part of a group of business savvy millennial entrepreneurs and managers who are helping to pitch the work-live-play merits of the Tampa Bay market in a new marketing campaign called Make It Tampa Bay. The campaign is backed by Visit Tampa Bay and the Tampa Hillsborough Economic Development Corp. and aimed at recruiting more millennial talent to relocate and stay in the Tampa Bay area. [Courtesy Tampa Hillsborough EDC, Visit Tampa Bay]
  3. Florida gas prices drop 25 cents on average over past month


    Gas prices are on a downward tear post-hurricane. Tampa Bay fell to $2.34 per gallon on Sunday, down 10 cents over the week, according to AAA, The Auto Club Group. Across the state, gas fell 7 cents over the same period to average $2.47 per gallon.

    Gas prices across the state fell 25 cents over 31 days. | [Times file photo]
  4. Entrepreneur expands interests with Twisted Crafts


    SOUTH TAMPA — Playgrounds of Tampa owner Mike Addabbo is expanding into the do-it-yourself industry with his new endeavor: Twisted Crafts.

     Jennifer and Michael Addabbo pose in their latest entrepreneurial enterprise: Twisted Crafts. Photo courtesy of Twisted Craft.
  5. Amazing Lash franchise expands to South Tampa


    SOUTH TAMPA — Jeff Tolrud opened the doors to his third Amazing Lash Studio franchise earlier this month, this time in South Tampa.

    When customers walk in, the studios have the same look and feel throughout the country, operator Jeff Tolrud said of Amazing Lash Studio. Tolrud opened his third in Hillsborough County earlier this month. Photo courtesy of Amazing Lash.